MCB remit facility
Muslim Commercial Bank has finalized arrangements with Habib & Al
Mansoor Exchange Co of Abu Dhabi for speedy handling of home remittances of Pakistanis
Shafiq A. Khan of MCB and Amin Bawa of Habib & Al Mansoor signed an
agreement to this effect in Dubai, says a press release.
State Bank cuts yield on TBs
The State Bank on Wednesday cut the yield on treasury bills of
different tenures by 17-25 basis points holding down interest rates at comfortable levels.
The rate-cut enabled the SBP to sell Rs 8.6 billion worth of bills to
raise short term loan for the government more than three times the preauction target
of Rs 2.5 billion.
Senior bankers said the auction had attracted Rs 222.56 billion worth
of bids of which the SBP accepted bids worth Rs 8.6 billion and scrapped the rest. In
doing so the SBP cut the yield on the bills by 17-25 basis points avoiding deeper cuts
that had become possible.
The SBP drained out Rs 8.6 billion from a fairly liquid interbank
market through sale of treasury bills: it sold Rs 7.30 billion worth of six-month bills at
a weighted average yield of 7.19 per cent; Rs 1.21 billion oneyear bills at 7.68 per cent
and Rs 150 million three-month bills at 7.11 per cent.
Curbs relaxed on bank guarantees
Banks can now issue open-ended guarantees on case by case basis for
certain purposes without clearance from the State Bank provided such guarantees are fully
secured against cash collateral or other liquid securities. Open-ended guarantees are
those which do not contain the specific amount and the date of expiry.
An SBP circular issued to all banks says the SBP has allowed banks to
issue the following types of guarantees:
(i) Advance payment or bid bond guaranteesguarantees against
performance of ongoing government/semi government and autonomous bodies contracts. (ii)
Guarantees requested by public utility companies such as gas and electlicity etc. in
respect of their customers to cover the utility supplied during the period of guarantee.
(iii) Court guarantees. (iv) Customs/Shipping Guarantees. (v) Revenue related government
SBP move to stop misuse of FCAs
The State Bank has separated foreign exchange reserves from foreign
currency accounts to prevent the misuse of the FCAs.
SBP Governor Ishrat Hussain told that the bank would never show these
FCAs as part of its reserves as was done by successive governments.
He said that at present there were $300 million in the FCAs, while $500
million had been taken away from the country.
He said gross reserves stood at $1.5 billion while net reserves were
being maintained at $1.2 billion, excluding $300 million relating to the
US firm to invest $80m in IT
International Telecommunication Ltd of the United States will invest
$80 million for the promotion of information technology (IT).
American Charge d' Affaires, Michele Sison speaking at a seminar here
Tuesday said that the company will invest $80 million in Pakistan to help promote IT
An American investors delegation will soon visit Pakistan, to initiate
a new chapter of cooperation between the two countries, she added.
Minister for Science and Technology, Prof. Dr. Attaur Rehman has
welcomed the American firm's decision.
The experience of Americans will be fully utilized for the promotion of
science and technology in Pakistan, to meet modern challenges, he added.
The government was committed to equip the new generation with modern
scientific and technical education, to enable them meet the new challenges, he said. The
government is taking concrete steps to actively promote science and technology both in the
rural and urban areas, to ensure prosperity in every pdevelopment sectors, the minister
observed. Dr. Atta said the new IT Policy will be announced within 15 days, to be
implemented through an integrated action plan. He directed PTCL to help in speeding up IT
promotion in the country.
Controller of International Telecommunication Limited, Ray Morris and
Chairman PTCL, Nasim S. Mirza, also spoke on the occasion.
Fresh FCY deposits growth halted
Fresh foreign currency deposits have almost stopped growing as resident
holders are now supposed to disclose the source of income and are required to pay
withholding tax on these deposits.
Bankers said fresh foreign currency deposits placed with State Bank saw
a growth of only $20 million in past two months. They said FCDs of all banks placed with
SBP since June 1999 stood at $327 million on March 31 up from $307 million on Jan 31,
Senior bankers close to SBP said total fresh foreign currency deposits
including $575 million placed abroad before June 3, 1999 also reflected sluggish growth at
below $880 million on March 31.
DBL to fund small enterprises
Doha Bank Limited (DBL) will expand its operation in Pakistan and
allocate sufficient funds to finance small and medium size enterprises.
This was stated by the Chief Manager DBL, Ahmed Hussain Khan. He said
Doha Bank will introduce paper-less banking in Pakistan which is now being practised in
most of the developed countries. He said the prime focus of the bank was on facilitating
Pakistan's foreign trade adding that during 1999 the total financing to this sector was Rs
Floatation of TFC issues deferred
At least one investment bank and three leasing companies have deferred
for the time being the floatation of their debt instruments worth Rsl.20 billion in the
expectation of further reduction in interest rates after the budget for 2000-01 is
announced, sources in the stock market said. The sources said Orix Leasing plans to issue
its term finance certificates (TFCs) worth Rs400 million, Pilcorp (second tranche) worth
Rs250 million, Atlas worth Rs300 million and Interbank Ltd (second tranche) worth Rs250
million. All the proposed TFC issues have already been assigned ratings by the Pakistan
Credit Rating Agency.